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US secretary of state John Kerry has defended the Obama administration’s decision to allow the UN Security Council to declare Israeli settlements illegal – and warned that Israel’s very future as a democracy is at stake.

Mr Kerry, responding to Israel’s fury over the US abstention of the United Nations vote, questioned Israeli prime minister Benjamin Netanyahu’s true commitment to Palestinian statehood, which has formed the basis for all serious peace talks for years.

Though Mr Netanyahu said he believes in the two-state solution, Mr Kerry said that under his leadership, Israel’s government is “the most right-wing in Israel’s history”.

Mr Kerry said in a farewell speech: “If the choice is one state, Israel can either be Jewish or democratic, it cannot be both – and it won’t ever really be at peace.”

The speech is a comprehensive airing of grievances that have built up in the Obama administration over eight years but were rarely, until this month, discussed publicly.

It marks the latest escalation in a vicious row between the US and Israel which has erupted in the last days of Barack Obama’s administration.

The extraordinary display of discord between allies – with US and Israeli officials openly disparaging each other – has also pitted Mr Obama against president-elect Donald Trump, who has firmly taken the side of Mr Netanyahu.

Israel’s government was enraged after the US abstained from voting on the UN Security Council resolution last week that called Israeli settlements in the West Bank and east Jerusalem a violation of international law.

Mr Netanyahu accused the US of colluding with the Palestinians and helping draft the resolution.

The US has vehemently denied those charges. Mr Kerry insisted the US “did not draft or originate” the resolution, introduce by Egypt and later by a handful of other nations.

“The United States did in fact vote in accordance with our values, just as previous administrations have done,” Mr Kerry said at the state department.

“The vote in the United Nations was about preserving the two-state solution. That’s what we were standing up for.”

For years, Mr Obama has been deeply frustrated by the continuing growth of Israeli settlements despite his pleas to Mr Netanyahu to rein them in. Israel’s government argues previous settlement freezes have failed to spur progress toward a peace deal and that stopping or removing them must not be a precondition for future talks.

Point-by-point, Mr Kerry tried to rebut the arguments Israel has used to defend the settlements, declaring that “the settler agenda is defining the future of Israel”.

He warned that Israelis at risk of a permanent occupation of Palestinian territory, drawing a pointed reference to America’s own history of racial segregation.

“Separate and unequal is what you would have, and nobody can explain how that works,” Mr Kerry said.

He reiterated that the Obama administration’s commitment to Israel is as strong as that of previous presidents, but he also noted that previous American administrations had also abstained on certain resolutions critical of Israel.

He emphasised the record levels of military assistance the US has provided Israel under Mr Obama, codified by a 10-year aid deal recently struck worth 38 billion dollars (£31 billion).

“No American administration has done more for Israel’s security than Barack Obama’s,” Mr Kerry said.

Mr Obama, who is on holiday with his family in Hawaii, has not commented publicly on the resolution or the resulting spat.

Seeking to show he is not focusing exclusively on Israel’s failings, Mr Kerry in the same sentence bemoaned Israel’s “seemingly endless occupation” of Palestinian land and Palestinian leaders’ “incitement” of violence.

He invoked the widespread concern that the growing Arab population will eventually make Jews a minority in Israel, creating a democratic crisis for Israel unless there is a separate Palestinian state.

Israeli leaders have made no secret that they are counting on Mr Trump to change US policy, and the president-elect assured them hours before Mr Kerry’s speech that they just needed to “hang on” until January 20, when he would be sworn in as president.

While Mr Trump has not outlined a vision, he has signalled a much more sympathetic approach toward Israel, appointing an ambassador with strong ties to the West Bank settler movement and promising to move the US embassy from Tel Aviv to Jerusalem over Palestinian objections.

“President-elect Trump, thank you for your warm friendship and your clear-cut support for Israel,” Mr Netanyahu said on Twitter, before Mr Kerry’s speech.

A senior Israeli Cabinet minister, Gilad Erdan, called Mr Kerry’s speech a “pathetic step” before the US secretary of state even began speaking.

The international community overwhelmingly opposes Israeli settlement construction in the West Bank and east Jerusalem, territories captured by Israel in 1967 and claimed by the Palestinians for an independent state.

The Palestinians, and most of the world, see the settlements, now home to 600,000 Israelis, as an obstacle to peace.